The Australian commercial property market’s numbers were not encouraging in the fourth quarter of 2012. Sales plummeted by 33 per cent during the period with the poor showing being blamed on the uncertainty surrounding the country’s economy, according to CBRE Group Inc.
The Los Angeles-based broker stated that the value of office, retail and industrial property fell from A$4.3 billion to less than A$2.9 billion in the three-month period ending December 31. These figures were based on sales numbers from the same quarter for 2011.
The Australian manufacturing and services sector contracted in December while a strong local currency and consumer caution combined to reign in household spending. The uncertainty resulted in a decline in retail sales figures for November for the first time in four months.
Home loan approvals were also down that month, even in light of the 1.75 per cent of interest rate cuts since November 2011 by the country’s central bank. The number of transactions declined in the second half of last year, according to Stephen McNabb, CBRE’s head of Australian research.
He cited “Mixed and sub-trend economic growth evidence, combined with subdued levels of consumer and business confidence….” as reasons for the lack of growth.
Sales of office buildings dropped by 12 per cent in 2012. This figure represented the worst performance among all sectors. In contrast, retail property transaction closings were up 24 per cent and industrial closings increased by 13 per cent. Foreign investors were less active in the market in the fourth quarter, which also had an impact on sales activity.
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